Page 175 - DMGT554_RETAIL_BUYING

Retail Buying

Notes with you, and you initially responded by saying “You’ll be wasting your time unless you are
willing to offer $10,000 and haul it after the sale.” This allows you to give them a starting figure
that is much closer to the end result you are looking for than you would have been otherwise.
This is an age old method that has always been an effective negotiation tactic. Keep in mind that
this tactic can also cause the individual you use it on to not make an offer on the item at all.
Calling Bluffs

Calling the opposing party’s bluff is a negotiation tactic that can really be to your advantage.
For instance, if you have a house that is for sale for $200,000, and they claim that their bank will
only qualify them for a $175,000 loan, you can call their bluff by saying that you can not let it go
for less than $190,000. If you would like, you can also make up an excuse as to why you can not
go any lower than that amount in order to make it seem as if you too have your limits.
For instance, you could say that the money is going to cover your child’s college education, and
that is as low as you are willing to go. By taking their financing problem and responding with
an explanation of why that won’t work, you will be able to make them come out of their shell if
they are truly interested in the product that you are selling.
Self Assessment

State whether the following statements are true or false:
13. Negotiation Tactics are a set of skills for life.
14. Negotiating is an essential skill set that we pick up at a diminishing age.
15. Nibbling is among the most popular of negotiation tactics.

11.6 Negotiating the Purchasing and Writing

Negotiating a purchase can often be more critical than negotiating an individual sale. Apart
from price, you may need to secure strategic essentials such as component quality and continuity
of supply. Good preparation, clear objectives and an awareness of common pitfalls are all you
need. They will remove the need for inspiration or dazzling technique and provide the basis for
purposeful, successful negotiation.
Negotiation in the purchasing process covers the period from when the first communication is
made between the purchasing buyer and the supplier through to the final signing of the contract.
Negotiation can be as simple as trying to obtain a discount on a case of safety gloves through to
the complexities of major capital purchases. A purchasing professional must aim to be successful
in their negotiations with suppliers to obtain the best price with the best conditions for every
item that is purchased.

11.6.1 Smaller Supplier Base and Long-term Contracts

The negotiation process has become a more important sector in the supply chain process as
companies look to reduce their expenditure whilst increasing their purchasing power. This
means that purchasing professionals have to negotiate increasingly better rates with suppliers
whilst maintaining or increasing quality and service. In the past companies had a long list of
suppliers who they would purchase different items from which required purchasing resources
to spend limited time on negotiating the lowest prices. The best solution available was to
compare list prices from catalogs and select the vendor based on that information. The trend
over the last decade has been to rationalize the supplier base and enter into long-term agreements

170 LOVELY PROFESSIONAL UNIVERSITY